Mortgage Rates in U.S. Rise With 30-Year Fixed at 3.42%

The average rate for a 30-year fixed mortgage was 3.42
percent in the week ended today, up from 3.38 percent and the
highest since September, McLean, Virginia-based Freddie Mac said
in a statement. The average 15-year rate rose to 2.71 percent
from 2.66 percent.

Home prices are increasing across the country as low
interest rates and improving employment boost demand. Higher
values support consumer spending by giving homeowners the
perception that they have a stronger household balance sheet and
by allowing them to refinance into lower-cost mortgages, Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc.
in New York, said in a note yesterday.

“Even small moves in home prices can have large effects on
consumption, because housing comprises such a significant share
of household assets,” LaVorgna wrote.

Sales of existing homes dropped 1 percent in December,
restrained by a tight inventory of available properties, while
the median price jumped 12 percent from a year earlier to
$180,800, figures from the National Association of Realtors
showed this week. The 4.65 million homes sold last year was the
most since 2007, the group said.